AbstractTo meet the pressing demand for alternative biofuel in the contemporary world, the production cost of biodiesel has to be decreased. Hence, this work addresses the usage of CaCO3‐rich industrial waste produced in a local paper industry in Assam, India for the synthesis of a heterogeneous catalyst for biodiesel synthesis. The collected lime sludge waste was subjected to calcination at 800°C for 3 h producing a CaO‐rich catalyst which was then employed in the transesterification of cottonseed oil. The optimized reaction conditions obtained were 5 wt% catalyst concentration, oil to methanol molar ratio of 1:12 at 65°C temperature, and 3 h of reaction time. The catalyst's reusability was evaluated up to four cycles. Besides, the prepared catalyst has been characterized using Fourier transfer infrared spectroscopy (FTIR), powder X‐ray Diffraction (p‐XRD), Scanning Electron Microscope (SEM), Energy Dispersive X‐ray analysis (EDX), and Brunauer–Emmett–Teller (BET) techniques and its basicity was measured using Hammett indicators. Moreover, the biodiesel obtained was characterized with 1H‐nuclear magnetic resonance (NMR), 13C‐NMR, Gas Chromatography‐ Mass Spectrometry (GC–MS), and FTIR techniques. A biodiesel yield of 98.03% was achieved and the quality of biodiesel formed during the transesterification of CSO also conforms to EN 14214 and ASTM D 6751 standards. Thus, our study highlights the sustainability and the potential for future industrial application of paper industrial waste in the production of biodiesel.